The Growing Need for Visibility in the Supply Chain

Technology can be a funny thing. As we learn time and time again, especially in our hyper-innovative age, we don’t realize how badly we need something until we finally have it.

Smartphones and the internet are perhaps the most universal example of this. Just imagine if someone took away our Uber and Lyft privileges, now that we’ve seen the light of their convenience.

The feeling extends well beyond our personal convenience, into the realm of business operations and execution.

Innovations such as artificial intelligence (AI), blockchain, and the Internet of Things (IoT) have quickly ascended to the mainstream, changing the landscape of offices and factories both big and small. Digitization is rewriting the rules for virtually every industry out there. And now that companies have a taste of the benefits, their priorities are changing as well, with budgets and hiring efforts built entirely around digital transformation.

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A prime example is real-time visibility, specifically in the supply chain. Enabled by AI and machine learning (ML), real-time visibility refers to the accurate, live tracking of parts, components, and products from their origin to their final destination. This is also referred to as supply chain visibility, or SCV.

According to a recent survey by consulting firm KPMG, SCV and traceability is the highest investment area for supply chain executives, and the reported top priority for 77% of respondents.

To achieve this high level of visibility, the executives who were surveyed plan to deploy or test one or more of the following technologies in the next two years:

For thousands of businesses, AI/ML advancements are intriguing for multiple reasons, as further revealed by this survey. Organizations value these technologies for their ability to optimize inventory, help with predictive distribution (e.g. demand forecasting), and optimize distribution networks for logistics, in that order.

When it comes to visibility, the ballooning demand is tied to a number of factors. It begins with efficiency. Having a firm hold on one’s assets can help production teams ensure a smooth workflow, quickly identify problem areas or “blind spots,” and easily locate specific items when necessary. This is especially relevant for manufacturers with connected devices, and larger operations with a distributed portfolio of assets.

A visibility initiative can help lower labor costs, uncover valuable metrics, and maximize customer satisfaction and business outcomes. The bar is being raised year after year, and it’s easy to see why visibility is one of the hottest buzzwords for supply chain decision-makers. We didn’t know how badly we needed it until technology made it imperative.

Visibility is also a defensive measure against counterfeiting, data theft, and other crimes that have been enabled by modern technology. It’s unfortunate that the same digital innovations making our personal and professional lives more efficient are also introducing new threats. But many would argue that it is a fair price to pay, and a few extra security measures are worth the far-reaching benefits of the modernized supply chain.

There is a wide spectrum of visibility in the supply chain realm. Depending on their budgets, structure, or strategy, manufacturers may seek digital visibility over certain aspects of their operation while allowing for gaps elsewhere. Full visibility entails everything from machinery components to trucks and their cargo — whether they’re parked outside or in transit across the country — and each trackable asset in between.

According to a June 2017 study, only 6% of companies had achieved full visibility across their supply chains. This number is most certainly higher in recent months, and will probably continue to climb higher. But as Forbes recently pointed out, 100% visibility is unnecessary in many cases. As with any business strategy, it’s important to consider your company’s needs and goals before directing time and resources to a new endeavor.

You will also need to consider how changing your technologies or processes will impact your company’s sustainability efforts and compliance with different rules and regulations. Not to mention: implementing new technology will require a new set of skills, that will either need to be instilled in your current workforce or the cause for additional hires.

Technology, along with the evolving philosophies around it, is pushing the supply chain forward at record speeds. From label printing to packaging all the way to intelligent asset tracking during and after shipment, the manufacturing sector is being transformed before our eyes. The priorities will continue to shift as well — just as companies get around to improved visibility, the goal posts will move to the next thing.

If there’s one principle that will remain in place through all of this, it’s flexibility. Nobody can predict the future (not entirely, at least). But the common thread in every modern success story is the ability and willingness to adapt.